NO COMPLIANCE BURDEN ON TAXPAYER’S  FOR GST TURNOVER DISPLAYED IN FORM 26AS

Last Updated On: Nov. 16, 2020, 11:31 p.m.
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NO COMPLIANCE BURDEN ON TAXPAYER’S  FOR GST TURNOVER DISPLAYED IN FORM 26AS

INTRODUCTION:

Form 26AS is an annual consolidated statement that is accessed by all the taxpayers from the Income Tax website using their Permanent Account Number(PAN).

The Revenue Department on Monday i.e 16/11/2020 states that taxpayers showing turnover of crores of rupees in GST but not paying a single rupee in Income Tax and also made an announcement that “there would be no change in the reporting requirement with the display of GST turnover in Form 26AS for honest Taxpayers.

The Department of Revenue made a statement that there will be no extra compliance burden on the taxpayers for GST turnover displayed on the Form 26AS.

 

PURPOSE:

The purpose for this is to see that GST turnover can be showed in 26AS for the information of taxpayers. Department of Revenue acknowledged that there may be differences in GSTR-3B’s filed and the GST shown in the form 26AS but it can't happen that a person shows turnover of crores of rupees in GST and doesn't pay a single rupee of income tax. There are quite a few such cases that have been detected in data analytics.

This would promote ease of compliance as the information regarding turnover reported in GST returns would be readily available to the taxpayers at the time of filing of their Income Tax Returns

 

ANALYSIS:

The DoR said that the notified Income Tax Return for the current AY 2020-21 already requires reporting of GST outward supplies in the Schedule GST. Therefore, the information displayed in Form 26AS would provide ease of compliance with the taxpayers in filing Schedule GST.

"There would be no change in the reporting requirement with the display of information of GST turnover in Form 26AS because the honest taxpayers are already furnishing GST returns and Income Tax Return and reporting their turnover correctly

 

Beginning June 1, 2020, Form 26AS has been revamped to an ''Annual Information Statement'' which apart from the TDS/ TCS details, shall now contain comprehensive information relating to be specified financial transactions, payment of taxes, demand/refund, and pending/completed proceedings undertaken by a taxpayer in a particular financial year that has to be mentioned in the income tax returns.
 

It would also show turnover reported in Goods and Services Tax (GST) return form GSTR-3B.

It would also contain various information reported by reporting entities in the statement of financial transactions such as information of cash deposit/withdrawal from saving bank accounts, sale/purchase of immovable property, time deposits, credit card payments, etc.

 

The display of information of GST turnover in Form 26AS, at the same time, would force dishonest taxpayers (who earlier used to evade income tax by under-reporting their turnover in the income tax returns as compared to turnover reported in the GST returns) to report their correct turnover and consequently force them to pays the correct income-tax
 

The revenue department has noticed that many unscrupulous persons are trying to avail or pass on input tax credit fraudulently by generating fake invoices and has already formulated a strategy for identifying these fake invoice generators which inter alia takes into account the income tax profiles of the suspected fake invoice generators

CONCLUSION:

BY suspecting the taxpayers who submits fake invoices can be identified and serious action can be under GST and other laws including suspension of their GST registration based on the fact that whether their income tax payment commensurate with the expected profit margin on turnover reported by them in the GST returns.
 

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